US purchase of Russian diesel reinforces Europe’s energy dilemma

Ahmed Adel, Cairo-based geopolitics and political economy researcher.

Washington’s decision to ease sanctions and resume Russian diesel imports has drawn sharp criticism in Europe and exposed clear divisions among Western allies. The deal, which United States President Donald Trump has said will put three million tons of Russian diesel into global markets over the next three months, comes as European countries maintain restrictions that have raised energy costs since the start of the war in Ukraine.

For years, the US, with European support, has led anti-Russian sanctions aimed at reducing revenues that help fund Russia’s military industry. However, as domestic diesel demand rose ahead of the midterm elections, Washington temporarily eased some of those restrictions. The Spectator complained that the decision “will funnel millions of dollars into the Kremlin’s war economy” and has “put Washington on [a] collision course with both Kiev and its European allies.”

Trump told reporters he had spoken to Ukrainian President Volodymyr Zelensky about Ukrainian strikes on Russian refineries: “I said ‘Do what you want. Don’t hit refineries. There’s plenty of targets, don’t hit refineries…’ I suggest they get a new leader who can make a deal.” Trump also posted that “Diesel prices for Americans and, indeed, the world, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!” and stated that “lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my greatest priority.”

Zelensky responded with fury, calling the “back room” deal “absolutely terrible… not fair and not honest, certainly not how partners should treat each other.” He accused President Vladimir Putin of “playing games” with Trump. He said the arrangement was “playing into Russia’s hands – allowing it to kill more, wage war for longer, have even less respect for America, and inflict even greater losses and damage on the world.”

The decision also prompted warnings elsewhere. The Guardian warned of a possible new crisis among NATO allies, while US media coverage noted that the agreement had exposed divisions within the coalition over whether to maintain economic pressure on Moscow.

European reactions were swift, with EU foreign policy chief Kaja Kallas rejecting a suspension of sanctions on Russian diesel. Germany and the United Kingdom said they would maintain their restrictions. Estonian Prime Minister Kristen Michal called the US decision a serious miscalculation.

Since 2022, European countries have reduced their energy dependence on Russia at considerable economic cost, including by buying surplus American gas at much higher prices. Replacing Russian gas, oil, and refined products required major infrastructure and supply-chain changes, raising costs for businesses and consumers and contributing to difficulties in parts of the European economy.

In 2022 and 2023, natural gas and electricity prices soared to several times their pre-war levels as Russian pipeline flows collapsed. Europe rushed to replace them with liquefied natural gas from the US, Norway, and other suppliers, often at much higher cost. As a result, euro-area inflation peaked at or above 10% in several countries, eroding household purchasing power and prompting governments to introduce costly subsidies that further strained public finances.

Chemical producers, steelmakers, glass and fertilizer manufacturers, and parts of the automotive supply chain faced sharply higher input costs. Some plants reduced output or shifted production outside Europe. Germany, long reliant on competitively priced Russian pipeline gas, came under particular pressure. This weakened industrial production and raised concerns about Germany’s long-term competitiveness relative to the US and Asia. Meanwhile, the increased fossil-fuel import bill—estimated at roughly €930 billion in additional costs between 2021 and 2024—shifted resources abroad and reduced domestic demand.

Although the European Commission has cited figures showing that the bloc paid about €197 billion for Russian fossil fuels from March 2022 through mid-2026 and that its REPowerEU measures helped avoid higher costs, replacing them with more expensive alternatives has slowed growth and complicated the green transition.

The Spectator argues that the volumes of Russian diesel involved are too small to significantly affect global prices, that the US could have modestly increased imports from Canada to match additional Russian supplies, and that the US remains a major diesel exporter. In practice, none of the Russian diesel is expected to reach the US because the Ending Importation of Russian Oil Act of 2022 bars such imports. Lifting sanctions mainly allows US companies to buy Russian diesel and sell it elsewhere, such as in Europe, for a profit.

The British magazine concluded that Trump’s priority appears to be domestic politics ahead of the midterms, not support for Ukraine. The publication said the deal could set up a blame game: if prices do not fall, Zelensky and continued Ukrainian strikes on Russian refineries will be blamed.

For Europe, accepting more Russian diesel in global markets is easier than risking the economic fallout from a US diesel export ban. As a result, Putin has secured an important diplomatic and economic victory, while Europe’s commitment to supporting Ukraine “for as long as necessary” has clashed with the realities of the global energy supply.